Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ELEPHANT TALK COMMUNICATIONS CORP | |
Entity Central Index Key | 1,084,384 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | ETAK | |
Entity Common Stock, Shares Outstanding | 163,991,861 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 237,196 | $ 369,250 |
Financing receivable | 0 | 272,425 |
Restricted cash | 247,361 | 246,151 |
Accounts receivable, net of an allowance for doubtful accounts of $9,580 at June 30, 2016 and $269,608 at December 31, 2015 | 739,496 | 1,112,032 |
Prepaid expenses and other current assets | 1,100,319 | 2,016,236 |
Total current assets | 2,324,372 | 4,016,094 |
NON-CURRENT ASSETS | ||
OTHER ASSETS | 399,664 | 473,893 |
PROPERTY AND EQUIPMENT, NET | 11,959,974 | 13,051,375 |
INTANGIBLE ASSETS, NET | 162,741 | 258,630 |
ASSETS HELD FOR SALE | 4,577,908 | 4,564,972 |
GOODWILL | 3,079,090 | 3,027,422 |
TOTAL ASSETS | 22,503,749 | 25,392,386 |
CURRENT LIABILITIES | ||
Accounts payable and customer deposits | 3,185,671 | 2,639,863 |
Obligations under capital leases (current portion) | 95,616 | 310,403 |
Deferred Revenue | 1,007,313 | 1,259,545 |
Accrued expenses and other payables | 5,232,295 | 5,031,712 |
Advance Purchase Payment on "Assets held for Sale" | 700,000 | 0 |
2014 10% + libor 3rd Party Loan (net of Debt Discount and Debt Issuance) | 5,453,632 | 5,580,277 |
Total current liabilities | 15,674,527 | 14,821,800 |
LONG TERM LIABILITIES | ||
Derivative liabilities | 1,831,312 | 945,618 |
Non-current portion of obligation under capital leases | 0 | 5,621 |
Other long term liabilities | 234,642 | 260,290 |
9% Unsecured Subordinated Convertible Promissory Note (net of Debt Discount and Debt Issuance) | 1,155,264 | 238,829 |
Non-current portion of deferred revenue | 1,072,105 | 1,066,687 |
Total long term liabilities | 4,293,323 | 2,517,045 |
Total liabilities | 19,967,850 | 17,338,845 |
Commitments and Contingencies (See Notes) | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | 0 | 0 |
Common Stock $0.00001 par value, 250,000,000 shares authorized, 163,745,961 issued and outstanding as of June 30, 2016 and 161,376,387 shares issued and outstanding as of December 31, 2015 | 271,096,128 | 269,470,165 |
Accumulated other comprehensive loss | (5,794,239) | (5,789,975) |
Accumulated deficit | (262,772,552) | (255,635,531) |
Elephant Talk Communications, Corp. stockholders' equity | 2,529,337 | 8,044,659 |
NON-CONTROLLING INTEREST | 6,562 | 8,882 |
Total stockholders' equity | 2,535,899 | 8,053,541 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 22,503,749 | $ 25,392,386 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable, Current | $ 9,580 | $ 269,608 |
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 |
Common Stock, Shares, Issued | 163,745,961 | 161,376,387 |
Common Stock, Shares, Outstanding | 163,745,961 | 161,376,387 |
Term Loan 2014 [Member] | ||
Description of variable rate basis | libor | libor |
Loan payable, interest rate spread | 10.00% | 10.00% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) / INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUES | $ 3,267,146 | $ 19,244,383 | $ 6,540,692 | $ 24,257,399 |
COST AND OPERATING EXPENSES | ||||
Cost of service (excluding depreciation and amortization) | 978,727 | 1,440,914 | 2,104,427 | 3,309,760 |
Product development | 808,901 | 1,490,683 | 2,098,902 | 2,526,804 |
Sales and marketing | 345,732 | 336,960 | 887,673 | 999,120 |
General and administrative | 2,187,189 | 2,664,281 | 5,680,885 | 5,625,377 |
Depreciation and amortization of intangibles assets | 1,113,947 | 1,745,034 | 2,211,551 | 3,491,181 |
Impairment for assets held and used | 937,835 | 0 | 937,835 | |
Total cost and operating expenses | 5,434,496 | 8,615,707 | 12,983,438 | 16,890,077 |
(LOSS) / INCOME FROM OPERATIONS | (2,167,350) | 10,628,676 | (6,442,746) | 7,367,322 |
OTHER (EXPENSE) / INCOME | ||||
Interest income | 24,611 | 22,587 | 50,547 | 52,859 |
Interest expense | (296,473) | (555,826) | (602,772) | (923,166) |
Interest expense related to debt discount and conversion feature | (261,345) | (403,679) | (613,144) | (467,651) |
Changes in derivative liabilities | 140,950 | 149,203 | 659,936 | 395,905 |
Gain on Extinguishment of Debt | 0 | 0 | 0 | 2,475,799 |
Other (expense) & income, net | (109,080) | 155,252 | 112,560 | (1,036,018) |
Amortization of deferred financing costs | (145,366) | (362,845) | (282,295) | (425,347) |
Total other (expense) / income | (646,703) | (995,308) | (675,168) | 72,381 |
(LOSS)/ INCOME BEFORE PROVISION FOR INCOME TAXES | (2,814,053) | 9,633,368 | (7,117,914) | 7,439,703 |
Provision for income taxes | 9,178 | 111,450 | 19,107 | 42,958 |
NET (LOSS) / INCOME | (2,823,231) | 9,521,918 | (7,137,021) | 7,396,745 |
OTHER COMPREHENSIVE (LOSS) / INCOME | ||||
Foreign currency translation (loss) / income | (345,478) | 508,818 | (4,264) | (1,203,620) |
COMPREHENSIVE (LOSS) / INCOME | $ (3,168,709) | $ 10,030,736 | $ (7,141,285) | $ 6,193,125 |
Net (loss) / income per common share and equivalents - basic | $ (0.02) | $ 0.06 | $ (0.04) | $ 0.05 |
Net (loss) / income per common share and equivalents - diluted | $ (0.02) | $ 0.06 | $ (0.04) | $ 0.05 |
Weighted average shares outstanding during the period - basic | 163,632,681 | 156,384,740 | 163,262,826 | 155,623,883 |
Weighted average shares outstanding during the period - diluted | 163,632,681 | 157,936,092 | 163,262,826 | 157,175,235 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) / income | $ (7,137,021) | $ 7,396,745 |
Adjustments to reconcile net (loss) / income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 2,211,551 | 3,491,181 |
Provision for doubtful accounts | (279,740) | 25,414 |
Stock based compensation | 1,306,131 | 1,584,323 |
Change in fair value of warrant liability | (659,936) | (395,905) |
Amortization of deferred financing costs | 282,295 | 425,347 |
Interest expense relating to debt discount and conversion feature | 613,144 | 467,651 |
Unrealized foreign currency transaction gain / (loss) | (112,560) | 1,036,018 |
Gain on Extinguishment of Debt | 0 | (2,475,799) |
Impairment for assets held and used | 0 | 937,835 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 668,599 | 4,305,466 |
Decrease in prepaid expenses, deposits and other assets | 677,015 | 1,100,067 |
Increase in accounts payable and customer deposits | 648,866 | 2,027,904 |
Decrease in deferred revenue | (287,246) | (8,889,549) |
Decrease in accrued expenses and other payables | 696,889 | (740,868) |
Net cash (used in) provided by operating activities | (1,372,013) | 10,295,830 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,329,611) | (4,113,308) |
Net cash used in investing activities | (1,329,611) | (4,113,308) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Financing receivable | 355,000 | 2,000,000 |
Exercise of warrants & options | 0 | 5,861 |
Financing related fees | (445,249) | (67,445) |
Principal payment on 2014 10% + libor 3rd Part Loan | (415,098) | (9,927,333) |
Proceeds from 9% Unsecured Subordinated Convertible Promissory Note | 2,273,000 | 0 |
Advance subordinated short term loan | 350,000 | 0 |
Advance Purchase Payment on "Assets held for Sale" | 450,000 | 0 |
Net cash provided by (used in) financing activities | 2,567,653 | (7,988,917) |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1,917 | 1,134,760 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (132,054) | (671,635) |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 369,250 | 1,904,160 |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 237,196 | 1,232,525 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid during the period for interest | 459,470 | 866,432 |
Cash paid during the period for income taxes | $ 0 | $ 14,481 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Unsecured Subordinated Convertible Promissory Note [Member] | ||
Interest Rate Percentage | 9.00% | |
Term Loan 2014 [Member] | ||
Loan payable, interest rate spread | 10.00% | 10.00% |
Description of variable rate basis | libor | libor |
Financial Condition
Financial Condition | 6 Months Ended |
Jun. 30, 2016 | |
Financial Condition [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | Note 1. Financial Condition As reflected in the accompanying consolidated financial statements, the Company reported net loss of $ 7,137,021 262,772,552 The Company’s financial statements through June 30, 2016 continue to be materially impacted by a number of events: · the modification of the November 17, 2014 Atalaya/Corbin Capital credit agreement following the default position of the Company; · the default by Cross River Investments (“CRI”) to the definitive agreement dated February 18, 2016 to complete the acquisition of ValidSoft by no later than March 21, 2016; and · the restructuring of the Company. The substantial three phase restructuring plan, which commenced in the fourth quarter of 2015, was designed to align actual expenses and investments with current revenues as well as introduce new executive management. The first phase of the restructuring plan encompassed fourth quarter 2015 and first quarter 2016. The second phase of the restructuring plan impacted second quarter 2016 results with a $ 0.2 2.1 on in 0.7 The annualized savings in ongoing operating expenses following the first and second phase of restructuring through the second quarter 6.6 154 265 During the second phase of the restructuring, in addition to its cost reduction initiatives the Company took steps to broaden its revenue focus, pivoting towards additional services including but not limited to recent complementary product initiatives. Management anticipates the benefit of these new revenue initiatives to become apparent in the second half of 2016. The planned sale of ValidSoft for the price of $ 12.5 As part of the agreements with the prospective suitor for ValidSoft, the Company received $ 700,000 250,000 During the second quarter 2016, the Company signed a non-binding definitive term sheets with prospective Lenders, which were expected to have resulted in an injection of immediate working capital and establish a basis for raising additional capital in support of both its restructuring and new growth initiatives. A series of delays beyond the control of the Company, has raised substantial doubt on whether this funding can be counted upon to ease the financial stress on the Company. The current senior Lender, Atalaya, has been informed and continues to work with the Company to find solutions including but not limited to proposed issuances of new equity, warrant and option solicitations and interim sources of capital. Until such new capital is secured and the senior Lender has been assured of satisfactory payoff, the Company is primarily responsible to this debtholder. The Company’s largest customer has been informed of the critical need to secure additional sources of capital during the third quarter 2016 and is working constructively in support of these initiatives. Effective August 15, 2016, Atalaya has increased its loan to the Company by an additional $ 1.0 The cash balance of the Company at June 30, 2016 was $ 237,196 In addition to pursuing other sources of debt and equity financing, the Company continues to evaluate strategic alternatives related to ValidSoft, including, but not limited to, cross-licensing arrangements in the event of divestiture. Several investment groups have expressed interest in acquiring the subsidiary, and the Company believes that the divestiture of ValidSoft, could generate sufficient cash to fully repay Atalaya, the senior lender, and fund the necessary working capital requirements including restructuring costs. The Company is evaluating and potentially integrating certain product capabilities of ValidSoft within its mobile telephony product portfolio and is expanding its pipeline of revenue opportunities accordingly. The Company expects that ValidSoft revenues may benefit from access to the Company’s existing customer base and subscribers and is evaluating potential co-marketing synergies, which could stay in force even in the event of a divestiture of the ValidSoft subsidiary. Although we have previously been able to raise capital as needed, there can be no assurance that additional capital will be available at all, or if available, on reasonable terms. Further, the terms of such financing may be dilutive to our existing stockholders or otherwise on terms not favorable to us, or our existing stockholders. If we are unable to secure additional capital, and/or do not succeed in meeting our cash flow objectives or the Lender takes steps to call the loan before new capital is attracted, the Company will be materially and negatively impacted, and we may have to significantly reduce our operations. As of June 30, 2016, these events combined with the delays in the divestiture of ValidSoft raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The additional $ 1 th |
Description of Business, Basis
Description of Business, Basis of Presentation and Use of Estimates | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 2. Description of Business, Basis of Presentation and Use of Estimates Business overview Elephant Talk Communications Corp. and its subsidiaries (also referred to as “Elephant Talk”, “ET” and “the Company”) provides a complete cloud platform, utilizing mobile, messaging and security capability. The Company’s technology is particularly relevant for the increasingly mobile customer communications and the growing need for reliable security tools to reduce electronic fraud. The Company enables and secures communications, transactions and applications for the connected world via its globally deployed cloud services. In addition to traditional communications carriers, Elephant Talk’s target customer base includes, enterprises and financial services companies. Elephant Talk’s solutions for mobility and security drive value for the business customer for both ‘per user’ and ‘per transactions’ based revenue, as well as revenue-share and gain-share participation. The Company’s product platform is designed to: • Reduce costs • Increase revenues • Enable businesses to scale • Deliver stronger security • Enable the creation of new brands and applications • Enhance customer service Elephant Talk’s intellectual property including Company software, source codes and licenses are proprietary and protected by international copyright. Basis of Presentation of Interim Periods The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Securities and Exchange Commission, or SEC, Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2015, included in our 2015 Annual Report on Form 10-K filed with the SEC on March 30, 2016, referred to as our 2015 Annual Report. The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our results of operations and financial position for the interim periods. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for future quarters or the full year. For a complete summary of our significant accounting policies, please refer to Note 2, “Business and Summary of Significant Accounting Policies,” of our 2015 Annual Report. There have been no material changes to our significant accounting policies during the six months ended June 30, 2016. Use of Estimates The preparation of the accompanying consolidated financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant areas of estimates include revenue recognition, valuation of goodwill and other intangible assets, bad debt allowance, valuation of financial instruments, useful lives of long lived assets and share-based compensation. Actual results may differ from these estimates under different assumptions or conditions. Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This update provides clarifying guidance regarding the application of ASU 2014-09 when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” which clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition and Derivatives and Hedging: Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting (“EITF”),” which rescinds SEC paragraphs pursuant to SEC staff announcements. These rescissions include changes to topics pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May 2016, the FASB also issued ASU No. 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients,” which provides clarifying guidance in certain narrow areas and adds some practical expedients. The effective dates for these ASU’s are the same as the effective date for ASU No. 2014-09, for the Company’s annual and interim periods beginning January 1, 2018. The Company is currently evaluating the impact of these ASU’s on its consolidated financial statements; however at the current time the Company does not know what impact the adoption of these ASU’s will have on its consolidated financial statements, financial condition or results of operations. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Financial Information [Abstract] | |
Additional Financial Information Disclosure [Text Block] | Note 3. Supplemental Financial Information The following tables present details of our condensed consolidated financial statements: June 30, December 31, Prepaid expenses and other current assets 2016 2015 Recurring & Non recurring prepaid expenses $ 472,740 $ 1,387,905 VAT 627,579 621,286 Inventory SIM cards - 7,045 $ 1,100,319 $ 2,016,236 June 30, December 31, Other Assets 2016 2015 Long term deposits $ 262,014 $ 285,404 Deferred financing costs 53,480 - Due from third parties 84,170 188,489 $ 399,664 $ 473,893 June 30, December 31, Property and equipment 2016 2015 Furniture & fixtures $ 256,776 $ 253,782 Computer, communications and network equipment 23,395,751 22,927,827 Software 3,764,753 3,651,222 Automobiles 12,559 37,428 Construction in progress 1,489,017 904,408 Acc. Depreciation Property & Equipment (16,958,882) (14,723,292) $ 11,959,974 $ 13,051,375 June 30, December 31, Property and equipment - Assets Held for Sale 2016 2015 Furniture & fixtures $ 26,786 $ 29,605 Computer, communications and network equipment 57,196 63,216 Software 2,040,910 2,255,695 Construction in progress 517,200 395,585 Acc. Depreciation Property & Equipment (699,214) (772,799) $ 1,942,878 $ 1,971,302 June 30, December 31, Intangible Assets 2016 2015 Customer Contracts, Licenses , Interconnect & Technology $ 1,022,111 $ 1,016,152 Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology (859,370) (757,522) $ 162,741 $ 258,630 June 30, December 31, Intangible Assets - Assets Held for Sale 2016 2015 Validsoft IP & Technology $ 13,158,851 $ 12,930,083 Accumulated amortization Validsoft IP & Technology (10,523,821) (10,336,413) $ 2,635,030 $ 2,593,670 June 30, December 31, Goodwill 2016 2015 Goodwill ValidSoft Ltd $ 2,708,307 $ 2,659,866 Goodwill Morodo Ltd. 180,382 177,155 Goodwill Telnicity 190,401 190,401 $ 3,079,090 $ 3,027,422 June 30, December 31, Accrued expenses and other payables 2016 2015 Accrued Selling, General & Administrative expenses $ 3,341,035 $ 3,648,920 Accrued cost of service 231,214 297,370 Accrued taxes (including VAT) 939,209 708,002 Accrued interest payable 298,603 199,104 Other accrued expenses 72,234 178,316 Advance subordinated short term loan 350,000 - $ 5,232,295 $ 5,031,712 2014 10% + libor 3rd Party Term Loan Agreement June 30, December 31, (Maturing December 2017) 2016 2015 2014 10% Term Loan (principal amount) $ 6,084,902 $ 6,500,000 Deferred Financing Costs (270,451) (343,130) Debt Discount - Original Issue Discount (99,681) (132,567) Debt Discount - Warrants (378,155) (501,202) Deferred Exit Fee 117,017 57,176 $ 5,453,632 $ 5,580,277 Breakdown of the 9% Unsecured Subordinated Convertible Promissory Note (Maturing December 2018) December 31, Additional Amortizations June 30, Convertible Note Principal Amount $ (1,275,000) $ (2,273,000) $ - $ (3,548,000) Debt Discounts & Financing Costs Investor Warrants 543,548 1,105,059 (286,683) 1,361,924 Conversion Feature value 214,159 296,414 (73,528) 437,045 7% Agent Warrants 86,593 144,158 (35,005) 195,746 Financing Costs 191,871 274,193 (68,043) 398,021 $ (238,829) $ (453,176) $ (463,259) $ (1,155,264) Number of underlying shares for Warrants & Conversion Feature issued in relation with the 9% Unsecured Subordinated Convertible Promissory Note June 30, 2016 December 31, Convertible note 11,826,667 4,250,000 Investor Warrants 11,826,667 4,250,000 7% Agent Warrants 827,867 297,500 7% Agent Warrants 827,867 297,500 Total Underlying share commitment 25,309,068 9,095,000 Fair Market Value Warrants & Conversion Feature FMV as of Additional closings Mark to market FMV as of FMV Conversion Feature $ 260,398 $ 296,414 $ (112,839) $ 443,973 Investor Warrants $ 591,473 $ 1,094,508 $ (469,017) $ 1,216,964 7% Agent Warrants $ 93,747 $ 154,708 $ (78,080) $ 170,375 FMV Warrant Liabilities $ 685,220 $ 1,249,216 $ (547,097) $ 1,387,339 Total 945,618 1,545,630 (659,936) 1,831,312 During the first quarter of 2016, the company modified the warrant exercise price from $ 0.45 0.30 220,490 125,511 94,979 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 4. Fair Value Measurements In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 Level 2 Level 3 The degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined by the lowest level input that is significant to the fair value measurement. June 30, 2016 Level 1 Level 2 Level 3 Total Derivative Liabilities Conversion feature $ - $ - $ 443,973 $ 443,973 Warrant Liabilities - - $ 1,387,339 $ 1,387,339 Total Derivatives Liabilities $ - $ - $ 1,831,312 $ 1,831,312 December 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities Conversion feature $ - $ - $ 260,398 $ 260,398 Warrant Liabilities - - $ 685,220 $ 685,220 Total Derivatives Liabilities $ - $ - $ 945,618 $ 945,618 The Company uses the Monte Carlo valuation model to determine the value of the outstanding warrants and conversion feature from the “Offering”. Since the Monte Carlo valuation model requires special software and expertise to model the assumptions to be used, the Company hired a third party valuation expert. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 5. Stockholders’ Equity (A) Common Stock The Company is presently authorized to issue 250,000,000 163,745,961 2,369,574 1,869,574 500,000 Reconciliation with Stock Transfer Agent Records: The shares issued and outstanding as of June 30, 2016 and December 31, 2015 according to the Company’s stock transfer agent’s records were 163,991,861 161,622,287 163,745,961 245,900 233,900 12,000 (B) Preferred Stock The Company’s Certificate of Incorporation (“Articles”) authorizes the issuance of 50,000,000 0.00001 For the period ended June 30, 2016, the Company did not issue any shares of Preferred Stock, and no shares of Preferred Stock are outstanding. (C) Warrants Throughout the years, the Company has issued warrants with varying terms and conditions related to multiple financing rounds, acquisitions and other transactions. The number of warrants outstanding at June 30, 2016 (unaudited) and December 31, 2015 have been recorded and classified as equity is 20,982,400 29,628,865 685,220 1,387,339 0.43 Outstanding Exercise/ Expiring June 30, 2016 December 31, 2015 Warrants Fundraising $ 0.30- $0.95 2013 2021 20,982,400 29,610,206 Warrants Other $ 2.21 2016 - 18,659 20,982,400 29,628,865 |
Amended and Restated 2008 Long
Amended and Restated 2008 Long Term Incentive Compensation Plan | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Note 6. Amended and Restated 2008 Long Term Incentive Compensation Plan Total Authorized under the plan 56,000,000 Shares issued in prior years 6,999,864 Shares issued during 2016 2,369,574 Options exercised during 2016 - Outstanding options 19,649,304 Available for grant at June 30, 2016: 26,981,258 During the first half year of 2016, the Company issued 2,369,574 500,000 Options: Number of Options Weighted Average Exercise Price Outstanding as of December 31, 2015 35,864,077 $ 1.15 Granted in 2016 - - Exercised (with delivery of shares) - - Forfeitures (Pre-vesting) (3,780,700) $ 1.05 Expirations (Post-vesting) (12,434,073) $ 1.74 Exchanged for Cashless exercise - - Outstanding as of June 30, 2016 19,649,304 $ 1.05 At June 30, 2016, the unrecognized expense portion of stock-based awards granted to employees under the 2008 Plan was approximately $ 918,749 5,854,531 |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Provision for income taxes $ 9,178 $ 111,450 $ 19,107 $ 42,958 As a result of our cumulative tax losses in the U.S. and certain foreign jurisdictions, and the full utilization of our loss carryback opportunities, we have concluded that a full valuation allowance should be recorded in such jurisdictions. In certain other foreign jurisdictions where we do not have cumulative losses, we had net deferred tax liabilities. |
Significant Customer and Geogra
Significant Customer and Geographical Information | 6 Months Ended |
Jun. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | Note 8. Significant Customer and Geographical Information Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Two largest customers 87.4 % 87.4 % 86.7 % 83.3 % The geographical distribution of our revenue, as a percentage of revenue, was as follows: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Europe 92.3 % 16.6 % 91.8 % 26.3 % All other (non-European) countries 7.7 % 83.4 % 8.2 % 73.7 % 100.0 % 100.0 % 100.0 % 100.0 % |
Advance Purchase Payment on "As
Advance Purchase Payment on "Assets held for Sale" | 6 Months Ended |
Jun. 30, 2016 | |
Advance Payments to Acquire Assets Held For Sale [Abstract] | |
Advance Payment On Assets Held For Sale [Text Block] | Note 9. Advance Purchase Payment on "Assets held for Sale" As provided by the terms of the previous Agreement with the prospective suitor for ValidSoft the Company previously received $500,000 loaned by the prospective buyer and $ 200,000 9 700,000 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | On August 15, 2016 the Company entered into the second amendment to the credit agreement dated November 17, 2014 with Corbin Mezzanine Fund I, L.P. and Atalaya Administrative LLC as administrative agent and collateral agent for Corbin Mezzanine Fund I. Under the second amendment, the senior secured lender increased the loan facility by $ 1,200,000 |
Description of Business, Basi17
Description of Business, Basis of Presentation and Use of Estimates (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation of Interim Periods The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Securities and Exchange Commission, or SEC, Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2015, included in our 2015 Annual Report on Form 10-K filed with the SEC on March 30, 2016, referred to as our 2015 Annual Report. The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our results of operations and financial position for the interim periods. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for future quarters or the full year. For a complete summary of our significant accounting policies, please refer to Note 2, “Business and Summary of Significant Accounting Policies,” of our 2015 Annual Report. There have been no material changes to our significant accounting policies during the six months ended June 30, 2016. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the accompanying consolidated financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant areas of estimates include revenue recognition, valuation of goodwill and other intangible assets, bad debt allowance, valuation of financial instruments, useful lives of long lived assets and share-based compensation. Actual results may differ from these estimates under different assumptions or conditions. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This update provides clarifying guidance regarding the application of ASU 2014-09 when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” which clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition and Derivatives and Hedging: Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting (“EITF”),” which rescinds SEC paragraphs pursuant to SEC staff announcements. These rescissions include changes to topics pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May 2016, the FASB also issued ASU No. 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients,” which provides clarifying guidance in certain narrow areas and adds some practical expedients. The effective dates for these ASU’s are the same as the effective date for ASU No. 2014-09, for the Company’s annual and interim periods beginning January 1, 2018. The Company is currently evaluating the impact of these ASU’s on its consolidated financial statements; however at the current time the Company does not know what impact the adoption of these ASU’s will have on its consolidated financial statements, financial condition or results of operations. |
Supplemental Financial Inform18
Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Financial Information [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | June 30, December 31, Prepaid expenses and other current assets 2016 2015 Recurring & Non recurring prepaid expenses $ 472,740 $ 1,387,905 VAT 627,579 621,286 Inventory SIM cards - 7,045 $ 1,100,319 $ 2,016,236 |
Schedule of Other Assets, Noncurrent [Table Text Block] | June 30, December 31, Other Assets 2016 2015 Long term deposits $ 262,014 $ 285,404 Deferred financing costs 53,480 - Due from third parties 84,170 188,489 $ 399,664 $ 473,893 |
Property, Plant and Equipment [Table Text Block] | June 30, December 31, Property and equipment 2016 2015 Furniture & fixtures $ 256,776 $ 253,782 Computer, communications and network equipment 23,395,751 22,927,827 Software 3,764,753 3,651,222 Automobiles 12,559 37,428 Construction in progress 1,489,017 904,408 Acc. Depreciation Property & Equipment (16,958,882) (14,723,292) $ 11,959,974 $ 13,051,375 June 30, December 31, Property and equipment - Assets Held for Sale 2016 2015 Furniture & fixtures $ 26,786 $ 29,605 Computer, communications and network equipment 57,196 63,216 Software 2,040,910 2,255,695 Construction in progress 517,200 395,585 Acc. Depreciation Property & Equipment (699,214) (772,799) $ 1,942,878 $ 1,971,302 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | June 30, December 31, Intangible Assets 2016 2015 Customer Contracts, Licenses , Interconnect & Technology $ 1,022,111 $ 1,016,152 Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology (859,370) (757,522) $ 162,741 $ 258,630 June 30, December 31, Intangible Assets - Assets Held for Sale 2016 2015 Validsoft IP & Technology $ 13,158,851 $ 12,930,083 Accumulated amortization Validsoft IP & Technology (10,523,821) (10,336,413) $ 2,635,030 $ 2,593,670 |
Schedule of Goodwill [Table Text Block] | June 30, December 31, Goodwill 2016 2015 Goodwill ValidSoft Ltd $ 2,708,307 $ 2,659,866 Goodwill Morodo Ltd. 180,382 177,155 Goodwill Telnicity 190,401 190,401 $ 3,079,090 $ 3,027,422 |
Schedule of Accrued Liabilities [Table Text Block] | June 30, December 31, Accrued expenses and other payables 2016 2015 Accrued Selling, General & Administrative expenses $ 3,341,035 $ 3,648,920 Accrued cost of service 231,214 297,370 Accrued taxes (including VAT) 939,209 708,002 Accrued interest payable 298,603 199,104 Other accrued expenses 72,234 178,316 Advance subordinated short term loan 350,000 - $ 5,232,295 $ 5,031,712 |
Schedule of Long-term Debt Instruments [Table Text Block] | 2014 10% + libor 3rd Party Term Loan Agreement June 30, December 31, (Maturing December 2017) 2016 2015 2014 10% Term Loan (principal amount) $ 6,084,902 $ 6,500,000 Deferred Financing Costs (270,451) (343,130) Debt Discount - Original Issue Discount (99,681) (132,567) Debt Discount - Warrants (378,155) (501,202) Deferred Exit Fee 117,017 57,176 $ 5,453,632 $ 5,580,277 |
Convertible Debt [Table Text Block] | (Maturing December 2018) December 31, Additional Amortizations June 30, Convertible Note Principal Amount $ (1,275,000) $ (2,273,000) $ - $ (3,548,000) Debt Discounts & Financing Costs Investor Warrants 543,548 1,105,059 (286,683) 1,361,924 Conversion Feature value 214,159 296,414 (73,528) 437,045 7% Agent Warrants 86,593 144,158 (35,005) 195,746 Financing Costs 191,871 274,193 (68,043) 398,021 $ (238,829) $ (453,176) $ (463,259) $ (1,155,264) Number of underlying shares for Warrants & Conversion Feature issued in relation with the 9% Unsecured Subordinated Convertible Promissory Note June 30, 2016 December 31, Convertible note 11,826,667 4,250,000 Investor Warrants 11,826,667 4,250,000 7% Agent Warrants 827,867 297,500 7% Agent Warrants 827,867 297,500 Total Underlying share commitment 25,309,068 9,095,000 |
Schedule of Warrant And Conversion Feature Liabilities [Table Text Block] | Fair Market Value Warrants & Conversion Feature FMV as of Additional closings Mark to market FMV as of FMV Conversion Feature $ 260,398 $ 296,414 $ (112,839) $ 443,973 Investor Warrants $ 591,473 $ 1,094,508 $ (469,017) $ 1,216,964 7% Agent Warrants $ 93,747 $ 154,708 $ (78,080) $ 170,375 FMV Warrant Liabilities $ 685,220 $ 1,249,216 $ (547,097) $ 1,387,339 Total 945,618 1,545,630 (659,936) 1,831,312 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following tables summarize fair value measurements by level as of June 30, 2016 and December 31, 2015 for and the Company’s liabilities measured at fair value on a recurring basis: June 30, 2016 Level 1 Level 2 Level 3 Total Derivative Liabilities Conversion feature $ - $ - $ 443,973 $ 443,973 Warrant Liabilities - - $ 1,387,339 $ 1,387,339 Total Derivatives Liabilities $ - $ - $ 1,831,312 $ 1,831,312 December 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities Conversion feature $ - $ - $ 260,398 $ 260,398 Warrant Liabilities - - $ 685,220 $ 685,220 Total Derivatives Liabilities $ - $ - $ 945,618 $ 945,618 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The table below summarizes the warrants outstanding as of June 30, 2016 and as of December 31, 2015: Outstanding Exercise/ Expiring June 30, 2016 December 31, 2015 Warrants Fundraising $ 0.30- $0.95 2013 2021 20,982,400 29,610,206 Warrants Other $ 2.21 2016 - 18,659 20,982,400 29,628,865 |
Amended and Restated 2008 Lon21
Amended and Restated 2008 Long Term Incentive Compensation Plan (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Reconciliation Of Registered And Available Shares And Or Options [Table Text Block] | Amended and Restated 2008 Long-Term Incentive Compensation Plan Total Authorized under the plan 56,000,000 Shares issued in prior years 6,999,864 Shares issued during 2016 2,369,574 Options exercised during 2016 - Outstanding options 19,649,304 Available for grant at June 30, 2016: 26,981,258 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Stock option activity is set forth below: Options: Number of Options Weighted Average Exercise Price Outstanding as of December 31, 2015 35,864,077 $ 1.15 Granted in 2016 - - Exercised (with delivery of shares) - - Forfeitures (Pre-vesting) (3,780,700) $ 1.05 Expirations (Post-vesting) (12,434,073) $ 1.74 Exchanged for Cashless exercise - - Outstanding as of June 30, 2016 19,649,304 $ 1.05 |
Income taxes (Tables)
Income taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Provision for income taxes $ 9,178 $ 111,450 $ 19,107 $ 42,958 |
Significant Customer and Geog23
Significant Customer and Geographical Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Sales to our significant customers, as a percentage of net revenue were as follows: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Two largest customers 87.4 % 87.4 % 86.7 % 83.3 % The geographical distribution of our revenue, as a percentage of revenue, was as follows: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Europe 92.3 % 16.6 % 91.8 % 26.3 % All other (non-European) countries 7.7 % 83.4 % 8.2 % 73.7 % 100.0 % 100.0 % 100.0 % 100.0 % |
Financial Condition (Details Te
Financial Condition (Details Textual) | Aug. 15, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2016 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Net Income (Loss) Attributable to Parent, Total | $ (2,823,231) | $ 9,521,918 | $ (7,137,021) | $ 7,396,745 | ||||
Retained Earnings (Accumulated Deficit), Total | (262,772,552) | (262,772,552) | $ (255,635,531) | |||||
Impairment of Ongoing Project | 2,100,000 | |||||||
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | 12,500,000 | |||||||
Cash and Cash Equivalents, at Carrying Value | $ 237,196 | $ 1,232,525 | $ 237,196 | $ 1,232,525 | $ 369,250 | $ 1,904,160 | ||
Entity Number of Employees | 154 | 154 | 265 | |||||
Other Noncash Expense | $ 700,000 | |||||||
Reduced Employee Expenses [Member] | ||||||||
Effect on Future Earnings, Amount | $ 6,600,000 | |||||||
Employee Severance [Member] | ||||||||
Restructuring Charges, Total | $ 200,000 | |||||||
Atalaya Corbin Capital Credit Agreement [Member] | ||||||||
Repayments of Debt | 250,000 | |||||||
Atalaya Corbin Capital Credit Agreement [Member] | Subsequent Event [Member] | ||||||||
Repayments of Senior Debt, Total | $ 1,000,000 | |||||||
Debt Instrument, Increase (Decrease), Net, Total | $ 1,000,000 | |||||||
Cross River Initiatives LLC [Member] | ||||||||
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | $ 700,000 |
Supplemental Financial Inform25
Supplemental Financial Information (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Supplemental Financial Information [Line Items] | ||
Recurring & Non recurring prepaid expenses | $ 472,740 | $ 1,387,905 |
VAT | 627,579 | 621,286 |
Inventory SIM cards | 0 | 7,045 |
Prepaid expenses and other current assets | $ 1,100,319 | $ 2,016,236 |
Supplemental Financial Inform26
Supplemental Financial Information (Details 1) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Supplemental Financial Information [Line Items] | ||
Long term deposits | $ 262,014 | $ 285,404 |
Deferred financing costs | 53,480 | 0 |
Due from third parties | 84,170 | 188,489 |
Other Assets, Noncurrent | $ 399,664 | $ 473,893 |
Supplemental Financial Inform27
Supplemental Financial Information (Details 2) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Acc. Depreciation Property & Equipment | $ (16,958,882) | $ (14,723,292) |
Property and equipment, net | 11,959,974 | 13,051,375 |
Assets Held for Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Acc. Depreciation Property & Equipment | (699,214) | (772,799) |
Property and equipment, net | 1,942,878 | 1,971,302 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 256,776 | 253,782 |
Furniture and Fixtures [Member] | Assets Held for Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 26,786 | 29,605 |
Computer, communications and network equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 23,395,751 | 22,927,827 |
Computer, communications and network equipment [Member] | Assets Held for Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 57,196 | 63,216 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,764,753 | 3,651,222 |
Software [Member] | Assets Held for Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,040,910 | 2,255,695 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 12,559 | 37,428 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,489,017 | 904,408 |
Construction in Progress [Member] | Assets Held for Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 517,200 | $ 395,585 |
Supplemental Financial Inform28
Supplemental Financial Information (Details 3) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Customer Contracts Licenses Interconnect And Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 1,022,111 | $ 1,016,152 |
Accumulated amortization | (859,370) | (757,522) |
Total intangible assets, net | 162,741 | 258,630 |
ValidSoft IP & Technology [Member] | Assets Held for Sales [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | 13,158,851 | 12,930,083 |
Accumulated amortization | (10,523,821) | (10,336,413) |
Total intangible assets, net | $ 2,635,030 | $ 2,593,670 |
Supplemental Financial Inform29
Supplemental Financial Information (Details 4) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||
Goodwill | $ 3,079,090 | $ 3,027,422 |
ValidSoft Ltd [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,708,307 | 2,659,866 |
Morodo Limited [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 180,382 | 177,155 |
Tenicity LLC [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 190,401 | $ 190,401 |
Supplemental Financial Inform30
Supplemental Financial Information (Details 5) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Supplemental Financial Information [Line Items] | ||
Accrued Selling, General & Administrative expenses | $ 3,341,035 | $ 3,648,920 |
Accrued cost of service | 231,214 | 297,370 |
Accrued taxes (including VAT) | 939,209 | 708,002 |
Accrued interest payable | 298,603 | 199,104 |
Other accrued expenses | 72,234 | 178,316 |
Loans payable | 350,000 | 0 |
Total accrued expenses | $ 5,232,295 | $ 5,031,712 |
Supplemental Financial Inform31
Supplemental Financial Information (Details 6) - 2014 10% Term Loan Agreement [Member] - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
2014 10% Term Loan (principal amount) | $ 6,084,902 | $ 6,500,000 |
Deferred Financing Costs | (270,451) | (343,130) |
Debt Discount - Original Issue Discount | (99,681) | (132,567) |
Debt Discount - Warrants | (378,155) | (501,202) |
Deferred Exit Fee | 117,017 | 57,176 |
Long-term Debt, Total | $ 5,453,632 | $ 5,580,277 |
Supplemental Financial Inform32
Supplemental Financial Information (Details 7) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Note Principal Amount | $ (3,548,000) | $ (1,275,000) |
Debt Discounts & Financing Costs | (1,155,264) | (238,829) |
Convertible Note Principal Amount, Total Amortizations | 0 | |
Debt Discounts & Financing Costs, Total Amortizations | (463,259) | |
Additional Closings [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Note Principal Amount | (2,273,000) | |
Debt Discounts & Financing Costs | (453,176) | |
Investor Warrants [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 1,361,924 | 543,548 |
Debt Discounts & Financing Costs, Total Amortizations | (286,683) | |
Investor Warrants [Member] | Additional Closings [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 1,105,059 | |
7% Agent Warrants [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 195,746 | 86,593 |
Debt Discounts & Financing Costs, Total Amortizations | (35,005) | |
7% Agent Warrants [Member] | Additional Closings [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 144,158 | |
Conversion Feature value [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 437,045 | 214,159 |
Debt Discounts & Financing Costs, Total Amortizations | (73,528) | |
Conversion Feature value [Member] | Additional Closings [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 296,414 | |
Financing Costs [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 398,021 | $ 191,871 |
Debt Discounts & Financing Costs, Total Amortizations | (68,043) | |
Financing Costs [Member] | Additional Closings [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | $ 274,193 |
Supplemental Financial Inform33
Supplemental Financial Information (Details 8) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
FMV Warrant Liabilities [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
FMV as of December 31, 2015 | $ 685,220 | |
Additional closings during 2016 | 1,249,216 | |
Mark to market adjustment Ytd-2016 | (547,097) | |
FMV as of June 30, 2016 | 1,387,339 | $ 685,220 |
Investor Warrants [Member] | FMV Warrant Liabilities [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
FMV as of December 31, 2015 | 591,473 | |
Additional closings during 2016 | 1,094,508 | |
Mark to market adjustment Ytd-2016 | (469,017) | |
FMV as of June 30, 2016 | 1,216,964 | 591,473 |
7% Agent Warrants [Member] | FMV Warrant Liabilities [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
FMV as of December 31, 2015 | 93,747 | |
Additional closings during 2016 | 154,708 | |
Mark to market adjustment Ytd-2016 | (78,080) | |
FMV as of June 30, 2016 | $ 170,375 | $ 93,747 |
Convertible Debt [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
Debt conversion, converted instrument, warrants or options issued | 25,309,068 | 9,095,000 |
Convertible Debt [Member] | Investor Warrants [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
Debt conversion, converted instrument, warrants or options issued | 11,826,667 | 4,250,000 |
Convertible Debt [Member] | 7% Agent Warrants [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
Debt conversion, converted instrument, warrants or options issued | 827,867 | 297,500 |
Convertible Debt [Member] | Agent Warrants Two [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
Debt conversion, converted instrument, warrants or options issued | 827,867 | 297,500 |
Convertible Debt [Member] | Convertible Notes Payable [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
Debt conversion, converted instrument, warrants or options issued | 11,826,667 | 4,250,000 |
FMV Conversion Feature [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
FMV as of December 31, 2015 | $ 260,398 | |
Additional closings during 2016 | 296,414 | |
Mark to market adjustment Ytd-2016 | (112,839) | |
FMV as of June 30, 2016 | 443,973 | $ 260,398 |
FMV Conversion Feature [Member] | FMV Warrant Liabilities [Member] | ||
Warrant and Conversion Feature Liabilities [Line Items] | ||
FMV as of December 31, 2015 | 945,618 | |
Additional closings during 2016 | 1,545,630 | |
Mark to market adjustment Ytd-2016 | (659,936) | |
FMV as of June 30, 2016 | $ 1,831,312 | $ 945,618 |
Supplemental Financial Inform34
Supplemental Financial Information (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Debt Instrument, Unamortized Discount | $ 125,511 | |||
Standardized Measure of Discounted Future Net Cash Flow Relating to Proved Oil and Gas Reserves, Accretion of Discount | $ 94,979 | |||
Agent Warrants One [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | ||
Agent Warrants Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | ||
Conversion Feature [Member] | ||||
Debt Instrument [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (97,925) | |||
Unsecured Subordinated Convertible Promissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | ||
Unsecured Convertible Proimissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.45 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | |||
2014 10% Term Loan Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 10.00% | 10.00% | ||
FMV Warrant Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair Value Adjustment, Change in Exercise Price | $ 220,490 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative Liabilities | ||
Derivative Liability | $ 1,831,312 | $ 945,618 |
Conversion Feature [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 443,973 | 260,398 |
Warrant [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 1,387,339 | 685,220 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Conversion Feature [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Warrant [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Conversion Feature [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Warrant [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 1,831,312 | 945,618 |
Fair Value, Inputs, Level 3 [Member] | Conversion Feature [Member] | ||
Derivative Liabilities | ||
Derivative Liability | 443,973 | 260,398 |
Fair Value, Inputs, Level 3 [Member] | Warrant [Member] | ||
Derivative Liabilities | ||
Derivative Liability | $ 1,387,339 | $ 685,220 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 6 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 20,982,400 | 29,628,865 | |
Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 20,982,400 | 29,610,206 | |
Warrants - Other [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 0 | 18,659 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.21 | ||
Class Of Warrant Or Right Expiration Date | Dec. 31, 2016 | ||
Maximum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.45 | ||
Maximum [Member] | Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.95 | ||
Class Of Warrant Or Right Expiration Date | Dec. 31, 2021 | ||
Minimum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | ||
Minimum [Member] | Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | ||
Class Of Warrant Or Right Expiration Date | Dec. 31, 2013 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 |
Common Stock, Shares, Issued | 163,745,961 | 161,376,387 |
Common Stock, Shares, Outstanding | 163,745,961 | 161,376,387 |
Stock Issued During Period, Shares, Period Increase (Decrease) | 2,369,574 | |
Number Of Common Stock Shares Issued Upon Exercise Of Warrants | 1,869,574 | |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Number Of Shares Issued According To Stock Transfer Agent | 163,991,861 | 161,622,287 |
Shares Issued Difference | 245,900 | |
Unreturned Shares From Cancelled Acquisitions | 233,900 | |
Shares Issued Under Employee Benefits Plan Treasury Shares | 12,000 | |
Class of Warrant or Right, Outstanding | 20,982,400 | 29,628,865 |
Investors [Member] | ||
Class of Warrant or Right, Outstanding | 20,982,400 | 29,628,865 |
Issuance Of Warrant Liabilities | $ 1,387,339 | $ 685,220 |
Placement Agents [Member] | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 0.43 | |
Common Stock [Member] | ||
Common Stock, Shares, Outstanding | 163,745,961 | |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures, Total | 500,000 |
Amended and Restated 2008 Lon38
Amended and Restated 2008 Long Term Incentive Compensation Plan (Details) - Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Authorized under the plan | 56,000,000 |
Shares issued in prior years | 6,999,864 |
Shares issued during 2016 | 2,369,574 |
Options exercised during 2016 | 0 |
Outstanding options | 19,649,304 |
Available for grant at June 30, 2016: | 26,981,258 |
Amended and Restated 2008 Lon39
Amended and Restated 2008 Long Term Incentive Compensation Plan (Details 1) - 2008 Long-Term Incentive Plan [Member] | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options, Outstanding | shares | 35,864,077 |
Number of Options, Granted | shares | 0 |
Number of Options, Exercised (with delivery of shares) | shares | 0 |
Number of Options, Forfeitures (Pre-vesting) | shares | (3,780,700) |
Number of Options, Expirations (Post-vesting) | shares | (12,434,073) |
Number of Options, Exchanged for Cashless exercise | shares | 0 |
Number of Options, Outstanding | shares | 19,649,304 |
Weighted Average Exercise Price, Outstanding (in dollars per share) | $ / shares | $ 1.15 |
Weighted Average Exercise Price, Granted (in dollars per share) | $ / shares | 0 |
Weighted Average Exercise Price, Exercised (with delivery of shares) (in dollars per share) | $ / shares | 0 |
Weighted Average Exercise Price, Forfeitures (Pre-vesting) (in dollars per share) | $ / shares | 1.05 |
Weighted Average Exercise Price, Expirations (Post-vesting) (in dollars per share) | $ / shares | 1.74 |
Weighted Average Exercise Price, Exchanged for Cashless exercise | $ / shares | 0 |
Weighted Average Exercise Price, Outstanding (in dollars per share) | $ / shares | $ 1.05 |
Amended and Restated 2008 Lon40
Amended and Restated 2008 Long Term Incentive Compensation Plan (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | |
Severance and Independent Contractor Agreement [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures, Total | 500,000 | ||
2008 Long-Term Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 918,749 | $ 5,854,531 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued during 2016 | 2,369,574 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Line Items] | ||||
Provision for income taxes | $ 9,178 | $ 111,450 | $ 19,107 | $ 42,958 |
Significant Customer and Geog42
Significant Customer and Geographical Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 100.00% | 100.00% | 100.00% | 100.00% |
Revenue Concentration [Member] | Geographic Concentration Risk [Member] | Europe [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 92.30% | 16.60% | 91.80% | 26.30% |
Revenue Concentration [Member] | Geographic Concentration Risk [Member] | All other (non-European) countries [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 7.70% | 83.40% | 8.20% | 73.70% |
Revenue Concentration [Member] | Two Largest Customers [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 87.40% | 87.40% | 86.70% | 83.30% |
Advance Purchase Payment on "43
Advance Purchase Payment on "Assets held for Sale" (Details Textual) | Jun. 30, 2016USD ($) |
Advance Purchase Payment on Assets Held For Sale | $ 700,000 |
Note Warrant [Member] | Cross River Initiatives LLC [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 9.00% |
Five Lakhs Advance Payment [Member] | |
Debt Instrument, Face Amount | $ 500,000 |
Working Capital Contribution [Member] | |
Debt Instrument, Face Amount | $ 200,000 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - Subsequent Event [Member] - Atalaya Corbin Capital Credit Agreement [Member] $ in Millions | Aug. 15, 2016USD ($) |
Subsequent Event [Line Items] | |
Debt Instrument, Increase (Decrease), Net, Total | $ 1 |
Debt Instrument, Maturity Date | Dec. 31, 2016 |